The Canadian dollar declined against its US counterpart on Wednesday, as tumbling energy prices outweighed stronger than forecast growth in Canadian wholesale sales.

The loonie tumbled to 0.8036 US after climbing to a daily high of 0.8089 US on Tuesday. The USDCAD exchange rate advanced 0.6 percent to 1.2445 and is testing initial resistance at 1.2449. On the downside, initial support is likely found at 1.2329.

In economic data, Canadian wholesale trade rebounded sharply in December, led by widespread gains in all sectors. Wholesale sales rose 2.5 percent to $55.4 billion in December, surpassing forecasts calling for a 0.3 percent gain. Wholesale sales had declined 0.3 percent in November.

Six of seven subsectors representing 80 percent of wholesale trade increased in December, led by motor vehicles and parts as well as miscellaneous goods. The motor vehicle industry posted its third consecutive monthly increase, official data showed.

Solid wholesale trade figures weren’t enough to lift the commodity-sensitive loonie after energy prices declined on Wednesday. US crude declined 1.27 percent to $52.85 a barrel. Global benchmark Brent crude dipped 1.55 percent to $61.56 a barrel.

Canada is home to the world’s third-largest known oil reserves and relies heavily on energy exports to fuel its domestic economy. The energy sector accounts for about one-third of Canada’s total export sales. Oil’s seven-month plunge is weighing heavily on the Canadian economy. Alberta, which is home to the country’s oil and gas industry, is expected to sink into a mild recession this year, according to the latest forecast by the Canadian Imperial Bank of Commerce (CIBC).

The US dollar was broadly supported on Wednesday, as investors disregarded weaker than forecast housing and industrial production data following news that Greece officially submitted a loan request to its EU paymasters.

The US dollar index, which measures the dollar’s performance against a basket of six currencies, rose 0.3 percent to 94.33.

US housing starts declined 2 percent in January, but remained above the important one-million mark for the fifth month running. Single-family starts eased off six-and-a-half year highs, slipping 6.7 percent to 678,000.

Building permits, a gauge of residential construction intentions, declined 0.7 percent to a seasonally adjusted annual pace of 1.05 million, official data showed.

Separately, US industrial production rose less than forecast in January, the Board of Governors of the Federal Reserve System confirmed today. Industrial production rose 0.2 percent in January after declining 0.3 percent the month before. The capacity utilization rate, which measures how fully companies are using their resources, declined 0.3 percentage points to 79.4 percent.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.

The Canadian dollar advanced on Monday as oil prices continued to rally, while US consumer spending declined at the sharpest rate since 2009 and manufacturing activity softened.

The loonie, as the Canadian dollar is known, rose 0.8 percent to 0.7941 US, erasing Friday’s losses. The USD/CAD exchange rate tumbled more than 100 pips to 1.2590. The pair faces initial support at 1.2510 and resistance at 1.2805.

Canada’s currency has declined for ten consecutive weeks against the US dollar, as plunging oil prices and weak fundamentals have weighed on the commodity-sensitive currency. The loonie faced renewed selling pressure two weeks ago when the Bank of Canada unexpectedly reduced its trend-setting interest rate to 0.75 percent and downgraded its economic outlook.

Rising oil prices helped lift the Canadian dollar on Monday. West Texas Intermediate for March delivery rose 1.6 percent to $49.01 a barrel. Global benchmark Brent crude rose more than 2.3 percent to $54.23 a barrel.

In economic data, Canadian manufacturing softened in January, the Royal Bank of Canada reported today. The RBC manufacturing PMI declined from 54.9 percent to 51 percent in January, as overall business conditions improved at the weakest rate since April 2013.

US manufacturing activity cooled again in January, as new orders continued to moderate, the Institute for Supply Management reported today. ISM’s monthly gauge of US manufacturing declined from 55.5 to 53.5. New export orders declined for the first time in 26 months, as only five manufacturing sub-sectors reported growth.

In a separate report the Department of Commerce said household spending declined at the sharpest rate since September 2009, a sign consumers were pinching their pennies toward the end of the holiday season. US personal spending declined 0.3 percent in December following a 0.5 percent advance the month before. However, personal incomes increased 0.3 percent. Combined with cheaper gas prices, higher incomes translated into a 4.9 percent increase in the saving rate.

Monday’s data deluge wrapped up with construction spending, a key indicator of US housing activity. Construction spending rose 0.4 percent in December, well below estimates calling for 0.7 percent. The November rate was revised up to reflect a 0.2 percent drop instead of the 0.3 percent decline reported last month.

The US government will report on factory orders on Tuesday, followed by services PMI and employment data on Wednesday. The United States and Canada will each report on international trade on Thursday.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.

The USD/CAD advanced for a tenth consecutive week last week, climbing to a nearly six-year high of 1.2794. The pair gained more than 9.5 percent in January, as the Canadian dollar continued to struggle with plunging oil prices and a shaky domestic recovery.

The USD/CAD was trading at 1.2700 in Monday’s early Asian session, as investors set their sights on a deluge of economic data from both countries. Below is a breakdown of this week’s major market movers.

Monday

On Monday the United States Department of Commerce will report on personal income and outlays for December. A slight increase in personal income is expected, although consumer spending is forecast to drop 0.2 percent in December following gains of 0.6 percent the prior month.

Separately, the Institute for Supply Management will release its monthly manufacturing PMI. US manufacturing activity is forecast to remain steady in January following a protracted slowdown in the second half of the year.

Tuesday

On Tuesday the US government will report on factory orders, which measure demand for durable and non-durable goods. According to forecasts, factory orders were unchanged in December after falling 0.7 percent the previous month.

Wednesday

ISM will release its monthly non-manufacturing PMI on Wednesday, an important gauge of US service activity. US services PMI is forecast to rise 1 percentage point to 57.2 in January.

Separately, the ADP Institute will release an advance estimate of US private sector employment growth. Last month the ADP said US private payrolls rose by 241,000 in December. Economists expect a January tally of 215,000.

Thursday

The United States and Canada will report on international trade in the latter half of the week. The US trade deficit reached an 11-month low of $39 billion in December, as oil imports fell to their lowest level in two decades. Meanwhile, Canada’s trade deficit widened in December, as oil exports fell to their lowest level since January 2012.

Friday

The most anticipated data releases of the week come Friday when both countries report on employment. According to forecasts, the US economy added 230,000 nonfarm payrolls in January after registering the strongest year of job creation since 1999. If forecasts hold, January would mark the 12^th consecutive month of above-200,000 job gains.

Canadian employment is forecast to rise 5,100 in January after contracting unexpectedly the month before. Statistics Canada last week lowered the number of jobs gained in 2014 from 185,700 to 121,300. The statistics agency also revised the unemployment rate for December from 6.6 percent to 6.7 percent.

Market Place

MKTPlace is a leading digital and social media platform for traders and investors. MKTPlace offers premiere resources for trading and investing education, digital resources for personal finance, news about IoT, AI, Blockchain, Business, market analysis and education resources and guides.